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Missing the Google Fiber Factor

While it seems unlikely that Google Fiber will take on the world anytime soon, there is no doubt that the success of the service, as well as the image of the company, vastly outweighs that of Australia’s NBN.

Uptake of the NBN is currently at 33%, with only 70,000 homes and businesses of the 207,500 NBN-connected premises choosing to sign up. In addition to this slow uptake, consumers are not subscribing to the high-end NBN plans offering 100 Mbps download. This slow uptake of services may cause an issue for NBN Co, particularly with a target of 6% increase in revenue per annum per user. Their immediate return on investment could be attributed to one simple step which they missed in their rollout plan.

Google Fiber selected Kansas City due to strong enthusiasm from local officials and potential customers, and they didn’t stop there. In addition to selecting which city to begin their rollout with, they again asked people to shout the loudest for their neighbourhood. Communities and interested customers had to pre-register with Google Fiber in order for their suburb to become eligible and receive priority for the roll out. Being eligible meant having at least between 5% and 25% people pre-register. This percentage is significant when you consider that only 56.8% of people turn out to vote in that state.

Despite all of NBN Co’s advertising campaigns and the quality of their network, they may simply be deploying to areas where consumers are not ready for their service yet. I’m sure those in regional Australia are extremely excited about being first on the list, however the 2.5 million residents in rural Australia are likely to be light bandwidth consumers compared to city dwellers. In addition, it costs a huge amount to roll out to these regions (even if we’re using satellite).

Instead of forcing the NBN onto consumers, it may have been financially more responsible to have asked consumers to opt-in, as well as prioritising neighbourhoods with easier and cheaper NBN construction costs. This would ensure maximum uptake and faster return on investment, leading to greater support for the Labor government’s network from those of us who are more financially conservative.